Form 10-Q

                      SECURITIES AND EXCHANGE COMMISSION
                           Washington, D. C. 20549

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 1996

                                      OR

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES 
    EXCHANGE ACT OF 1934

For the transition period from ________________to _________________

For Quarter Ended September 30, 1996

                             TRANSNET CORPORATION
            (Exact name of registrant as specified in its charter)


DELAWARE_________________              ______________22-1892295_________
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
incorporation or organization)

45 Columbia Road, Somerville, New Jersey               08876-3576
(Address of principal executive offices)            (Zip Code)

Registrant's Telephone Number, Including 908-253-0500
----------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last Report

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

    Yes __X__            No _____

Indicate the number of shares outstanding of each of the issuer's classes of
 common stock, as of November 8, 1996: 5,216,804.

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                             TRANSNET CORPORATION
                                  FORM 10-Q

                              TABLE OF CONTENTS

                                                                   Page No.


PART I.  FINANCIAL INFORMATION

      Consolidated Balance Sheets
            September 30, 1996 and June 30, 1996                      3


      Consolidated Statements of Operations
            Three Months Ended September 30, 1996 and 1995            4


      Consolidated Statements of Cash Flows
            Three Months Ended September 30, 1996 and 1995        5 - 6


      Notes to Consolidated Financial Statements                      7


      Management's Discussion and Analysis                        8 - 9



PART II.  OTHER INFORMATION                                          10












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                    TRANSNET CORPORATION AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEETS
                                 (UNAUDITED)
                                    ASSETS
                                               September 30,        June 30,
                                                  1 9 9 6            1 9 9 6
CURRENT ASSETS:
   Cash and Cash Equivalents                $   1,688,083       $   2,383,741
   Accounts Receivable - Net                    7,769,808           7,366,019
   Inventories                                  3,140,578           3,642,228
   Deferred Tax Asset                             314,750             314,750
   Other Current Assets                           240,346             465,943
                                            -------------        ------------

   TOTAL CURRENT ASSETS                     $  13,153,565       $  14,172,681
   --------------------                     -------------       -------------

PROPERTY AND EQUIPMENT - NET                $   1,102,517       $   1,158,083
----------------------------                -------------       -------------

OTHER ASSETS                                $   1,040,240       $   1,051,261
------------                                -------------       -------------

   TOTAL ASSETS                             $  15,296,322       $  16,382,025
   ------------                             =============       =============

                     LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
   Accounts Payable                         $     740,705       $   1,739,706
   Accrued Expenses                               521,155             539,104
   Floor Plan Payable                           2,617,638           2,852,328
   Deferred Income                                253,315             319,284
   Other Current Liabilities                      150,126             215,501
                                            -------------      --------------

   TOTAL CURRENT LIABILITIES                $   4,282,939       $   5,665,923
   -------------------------                -------------       -------------

   DEFERRED TAX LIABILITY                   $      48,750       $      48,750
   ----------------------                   -------------       -------------

STOCKHOLDERS' EQUITY:
   Capital Stock - Common $.01 Par Value,
   Authorized 15,000,000 Shares;
   Issued 7,469,524 Shares
   (of which 2,252,720 are in Treasury)     $      74,695       $      74,695

   Paid-In Capital                             10,686,745          10,686,745
   Retained Earnings                            6,420,836           6,123,555
                                            -------------      --------------

   Totals                                   $  17,182,276       $  16,884,995
   Less:  Treasury Stock - At Cost             (6,217,643)         (6,217,643)
                                          ----------------      --------------

   TOTAL STOCKHOLDERS' EQUITY               $  10,964,633       $  10,667,352
   --------------------------               -------------       -------------

TOTAL LIABILITIES AND STOCKHOLDERS'
   EQUITY                                 $    15,296,322       $  16,382,025
   ------                                 ===============       =============

See Notes to Consolidated Financial Statements.

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                     TRANSNET CORPORATION AND SUBSIDIARY

                    CONSOLIDATED STATEMENTS OF OPERATIONS

                                 (UNAUDITED)


                                            THREE MONTHS ENDED SEPTEMBER 30,
                                                   1 9 9 6           1 9 9 5


REVENUE                                      $   16,539,108     $  15,729,967
-------

COST OF REVENUE                                  14,696,920        14,013,222
---------------                              --------------     -------------

   GROSS PROFIT                              $    1,842,188     $   1,716,745
   ------------                              --------------     -------------


EXPENSES
Selling, General and Administrative Expenses $    1,560,137     $   1,425,518
Bad Debt Expense                                      7,500            12,000
                                             --------------     -------------

                                             $    1,567,637     $   1,437,518
                                             --------------     -------------


OPERATING INCOME                             $      274,551     $     279,227
-----------------                            --------------     -------------

OTHER INCOME (EXPENSE)
   Interest Income                           $       28,032     $      17,926
   Interest Expense                                  (5,302)          (61,037)
                                             ---------------    -------------

   TOTAL OTHER INCOME (EXPENSE) - NET        $       22,730     $     (43,111)
   ----------------------------------        --------------     --------------

INCOME BEFORE PROVISION
   FOR INCOME TAXES                          $      297,281     $     236,116
   ----------------

PROVISION FOR INCOME TAX                                  0                 0
------------------------                     --------------     -------------


NET  INCOME                                  $      297,281     $     236,116
                                             ==============     =============

INCOME PER COMMON SHARE                      $         0.06     $        0.05
-----------------------                      ==============     =============



See Notes to Consolidated Financial Statements.

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                     TRANSNET CORPORATION AND SUBSIDIARY

                    CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (UNAUDITED)


                                         THREE MONTHS ENDED SEPTEMBER 30,
                                                   1 9 9 6         1 9 9 5


OPERATING ACTIVITIES:
     Net Income                                 $   297,281     $   236,116
                                                -----------     -----------
     Adjustments to Reconcile Net Income
          to Net Cash:
     Depreciation and Amortization              $    88,803     $    36,756

Changes in Assets and Liabilities:
     (Increase) Decrease in:
     Accounts Receivable                           (403,789)      2,227,271
     Inventory                                      501,650       1,293,612
     Other Current Assets                           225,597        (412,246)
     Other Assets                                      (979)         (2,668)

Increase (Decrease) in:
     Accounts Payable and Accrued
       Expenses                                  (1,016,950)     (1,310,915)
     Deferred Income                                (65,969)       (100,580)
     Other Current Liabilities                      (65,375)       (131,956)
                                                ------------    ------------

Total Adjustments                               $  (737,012)    $ 1,599,274
                                                ------------    -----------

NET CASH - OPERATING ACTIVITIES - FORWARD       $  (439,731)    $ 1,835,390
-----------------------------------------       ------------    -----------


INVESTING ACTIVITIES:
     Capital Expenditures                       $   (21,237)    $    ---

NET CASH - INVESTING ACTIVITIES - FORWARD           (21,237)    $       ---
-----------------------------------------         ---------     -----------




See Notes to Consolidated Financial Statements.

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                     TRANSNET CORPORATION AND SUBSIDIARY

                    CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (UNAUDITED)



                                         THREE MONTHS ENDED SEPTEMBER 30,
                                                   1 9 9 6          1 9 9 5

NET CASH - OPERATING ACTIVITIES -
     Forwarded                                  $  (439,731)    $ 1,835,390
     ---------                                  ------------    -----------


NET CASH - INVESTING ACTIVITIES -
     Forwarded                                  $(21,237)    $
     ---------                                  ---------    -------
FINANCING ACTIVITIES
     Floor Planning Payable                     $  (234,690)    $(2,117,064)
     ----------------------                     ------------    --------------

NET CASH - FINANCING ACTIVITIES           $         (234,690)   $(2,117,064)
-------------------------------                -------------    -----------


NET INCREASE (DECREASE) IN CASH AND
     CASH EQUIVALENTS                           $  (695,658)    $  (281,674)
     ----------------                           -----------     -----------


CASH AND CASH EQUIVALENTS AT
     BEGINNING OF PERIODS                       $ 2,383,741     $ 1,549,206
     --------------------                       -----------     -----------


CASH AND CASH EQUIVALENTS AT
     END OF PERIODS                             $ 1,688,083     $ 1,267,532
     --------------                             ===========     ===========



See Notes to Consolidated Financial Statements.

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                     TRANSNET CORPORATION AND SUBSIDIARY
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
         (Information as of September 30, 1996 and 1995 is unaudited)


(1.) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     Consolidation:  The consolidated financial statements include the accounts
     of the Corporation and its wholly-owned subsidiary:  Century American
     Corporation.  Intercompany transactions and accounts have been eliminated
     in  consolidation. During the prior year the Corporation liquidated four
     inactive subsidiaries whose activities were previously merged with the 
     Corporation.

     Inventory:  Inventory consists of finished goods. The Corporation's 
     inventory is valued at the lower of cost
     (determined on the average cost basis) or market.

     Cash and Cash Equivalents: For the purposes of the statement of cash flows,
     the Corporation considers highly liquid debt instruments,  purchased with a
     maturity of three months or less, to be cash equivalents.

     Earnings Per Share:  Earnings per common share are based on 5,216,804
     weighted shares outstanding for the periods ended September 30, 1996 and 
     1995.


(2.) INCOME TAXES

     Effective  July 1,  1993,  the  Corporation  adopted  Financial  Accounting
     Standards Statement No. 109, Accounting for Income Taxes ("FAS 109"). Under
     FAS 109,  deferred  tax  assets and  liabilities  are  determined  based on
     differences  between  financial  reporting  and tax  bases  of  assets  and
     liabilities,  and are  measured  using the  enacted tax rates and laws that
     will be in effect when the differences are expected to reverse. Adoption of
     FAS 109 had no material  effect on the Financial  Statements.  Prior to the
     adoption of FAS 109, income tax expense was reported  pursuant to Financial
     Accounting Standards Statement No. 96.

     The  Corporation  has a  deferred  tax  asset  of  $1,120,000  based on net
     operating  loss  carryforwards  of  approximately  $1,700,000.  A valuation
     allowance  of $805,250  has been  provided  against  this  deferred  asset.
     Realization  of the tax asset is  dependent  upon future  events  effecting
     utilization of the net operating loss carryforwards ("NOL's").
     NOL's expire in the years 2005 and 2006.

     Current tax expense of $117,200 has been offset by the net  operating  loss
carryforward benefit of $117,200.

(3.) RECLASSIFICATION

     Certain  items from prior year's  Balance Sheet and Statement of Operations
     have been reclassified to conform to the current year's presentation.

     In the  opinion of  management,  the  accompanying  unaudited  consolidated
     financial  statements  contain all  adjustments  consisting  only of normal
     recurring  adjustments  necessary to present fairly the financial position,
     the results of operations and cash flows for the periods presented.

     These  statements  should  be read  in  conjunction  with  the  summary  of
     significant  accounting  policies and notes contained in the  Corporation's
     annual report on Form 10-K for the year ended June 30, 1996.



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                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Results of Operations

Revenues for the three  months  ended  September  30, 1996 were  $16,539,108  as
compared  with  $15,729,967  for the quarter ended  September 30, 1995.  For the
quarter ended September 30, 1996 the Corporation reported net income of $297,281
as compared  with net income of $236,116 for the  corresponding  period in 1995.
The  increase  in  revenues is due to  increases  in  hardware  sales as well as
increased demand for the  Corporation's  technical  services  (hardware  service
contracts, technical support contracts and training).

Earnings for the quarter ended September 30, 1996 are  attributable to increased
revenues,  management's concentration on sales of network and system integration
products which yield higher profit margins, the Corporation's  technical service
and support programs, and continued adherence to cost control measures.  Service
related revenues,  though not a material source of the  Corporation's  revenues,
are  significant in their  contributions  to earnings  because these  operations
yield a higher profit margin than equipment sales.  The Corporation  anticipates
that the technical service segments of its operations will continue to expand in
the future.  For the quarter ended  September 30, 1996, the increase in revenues
from the provision of service,  support,  outsourcing and network integration is
largely the result of the  Corporation  renewing  and/or  entering  into service
contracts with a number of large  corporate  customers.  Most of these contracts
are  short-term,  usually  twelve months or less, and contain  provisions  which
permit early  termination.  Although the  contracts  generally  contain  renewal
terms, there is no assurance that such renewals will occur.

The computer industry continually faces manufacturers' reductions in prices on a
wide array of products,  thereby increasing competition,  which results in lower
prices  to  customers  and a  reduction  in  profit  margins.  To  maximize  the
Corporation's profit margin,  management has modified its marketing strategy and
has  enforced  expense  controls.  Management's  current  marketing  strategy is
designed  to  increase  sales of lower  revenue/higher  profit  margin  products
related  to  service  and  support  operations.   Management's  efforts  include
primarily  targeting  commercial  customers,  and to a lesser extent educational
customers, who provide marketplaces for a wide range of products and services at
one time, a cost-effective  approach to sales.  Management believes it maximizes
profits through concentration on sales of value-added applications; promotion of
the  Corporation's  service  and support  operations;  and strict  adherence  to
cost-cutting  controls.  Management  emphasizes  the  promotion of its technical
service,  support,   outsourcing  and  network  integration  capabilities,   and
continues the aggressive  pursuit of an increased  volume of equipment sales and
promotion of its training services.

Interest  income for the quarter  increased  as  compared  to the  corresponding
period in the prior year because of the increase in the amount of funds invested
and higher yields. Interest expense decreased in the quarter ended September 30,
1996 compared to the same period in 1995 as a result of management's  efforts to
shorten the collection cycles of accounts receivable, with a resulting reduction
in related financing costs.

Selling,  general and administrative  expenses remained  relatively  constant at
approximately  9% of revenues for the quarter ended September 30, in both fiscal
1996 and 1995 periods,  due to  management's  strict  adherence to  cost-control
measures.

Liquidity and Capital Resources

There are no material commitments of the Corporation's capital resources.

The  Corporation  currently  finances a portion of its accounts  receivable  and
finances   purchases  of  portions  of  its  inventory  through   floor-planning
arrangements  under  which  such  inventory  secures  the  amount   outstanding.
Inventory  decreased in the quarter ended  September 30, 1996 as compared to the
corresponding period in 1995 in response to increased inventory turns related to
the higher volume of sales.  Management  shall  continue its efforts to increase
turnover  and to provide  the  Corporation  with  protection  against  inventory
obsolescence  resulting  from the rapid  technological  advances of the computer
industry.

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                   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Liquidity and Capital Resources

Accounts  receivable and payable  decreased for the quarter ended  September 30,
1996 compared with the same period in 1995 as a result of  management's  efforts
to shorten  receivable and payable  cycles.  Cash levels  decreased in the three
months ended  September 30, 1996 as compared to a decrease in cash levels during
the  corresponding  period in 1995.  The  decrease is due to  scheduled  payment
requirements under the floor planning arrangements.

For the fiscal quarter ended  September 30, 1996, as in the fiscal quarter ended
September 30, 1995, the internal resources of the Corporation were sufficient to
enable the Corporation to meet its obligations.


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                                   PART II.

                              OTHER INFORMATION


Item 6:  Exhibits and Reports on Form 8-K

            A.  Exhibits - None required to be filed for Part II of this report.

            B.  Reports on Form 8-K - None filed during the quarter for which 
                this report is submitted.



                                  SIGNATURES


Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.




                                       TRANSNET CORPORATION
                                       (Registrant)




                                       /s/ Steven J. Wilk
                                       Steven J. Wilk, President



                                       /s/ John J. Wilk
                                       John J. Wilk,
                                     Principal Financial and Accounting Officer
                                     and Chairman of the Board of Directors




DATE:  November  13, 1996




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